NEW YORK: Gold prices retreated to a one-week low on Monday as the dollar firmed and traders digested US President Donald Trump’s extension of his July 9 tariff deadline to August 1 and assertion that the US is close to several trade deals.
Spot gold was down 0.8% at $3,307.87 an ounce at 1302 GMT after hitting its lowest since June 30 at $3,296.09. US gold futures lost 0.7% to $3,318. The stronger dollar, up 0.2% against a basket of other major currencies, makes dollar-priced gold more expensive for buyers with other currencies.
“The market volumes remain quiet at this moment, and price action is probably still just reflecting the latest piece of economic data, but also starting to look forward to the potential for trade deals to be announced,” said Daniel Ghali, commodity strategist at TD Securities. Last week’s stronger than expected US payroll data cemented expectations that the Federal Reserve is unlikely to cut interest rates as early as previously expected.
Minutes of the Fed’s latest policy meeting and speeches by several Fed officials are due this week for further insights into the central bank’s policy path. Elsewhere, China’s central bank added gold to its reserves in June for an eighth consecutive month, official data from the People’s Bank of China (PBOC) showed on Monday. “The PBoC in particular has been diversifying foreign exchange reserves substantially and an uptick in uncertainty and geopolitical risk may speed up the process,” said Zain Vawda, analyst at MarketPulse by OANDA. In other precious metals, spot silver fell 1.6% to $36.32 an ounce, platinum shed 2.9% to $1,350.97 and palladium lost 3% to $1,100.65.
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